Taxes Tax Planning What Are Travel Expenses for Tax Purposes? By Jake Safane Updated on December 6, 2022 Reviewed by Lea D. Uradu Fact checked by J.R. Duren In This Article View All In This Article How Travel Expenses Work How To Calculate and File Travel Expenses What Tax-Deductible Travel Costs Mean for Individuals Frequently Asked Questions (FAQs) Photo: Marko Geber / Getty Images Definition Travel expenses are certain travel-related business costs that you can deduct for tax purposes. Key Takeaways Travel expenses are tax-deductible costs associated with traveling for business, away from your main workplace.Travel expenses eligible for tax deduction need to be “ordinary and necessary” and have a business purpose You generally can’t deduct costs such as those incurred for a personal vacation.Only businesses, including self-employed individuals, can typically deduct travel expenses. How Travel Expenses Work When filing taxes, your travel expenses are the costs associated with travel that a business can generally deduct. The Internal Revenue Service (IRS) defines these costs as “ordinary and necessary expenses of traveling away from home for your business, profession, or job.” For example, a business owner might drive to a client’s office a few hours away and stay at a hotel overnight before driving home the next day. In that case, the business owner can often deduct travel expenses such as gas (or they might use the standard mileage rate rather than adding up actual car expenses) and lodging. However, not all travel costs are tax-deductible travel expenses. For one, traveling to and from your home to your main office wouldn’t count as travel, because that would just be commuting, which isn’t deductible. Also, tax-deductible travel expenses can’t be “lavish or extravagant,” per the IRS. While these terms can be somewhat subjective, it helps to refer back to the “ordinary and necessary” guidelines. If your business is centered around blogging about luxury resorts, then perhaps staying at some higher-end hotels could be considered an ordinary part of doing your job. Yet, if you’re a self-employed graphic designer and you travel to another city to see a client, it might not be considered ordinary to stay at a $1,000-per-night hotel when plenty of other reasonable options exist at around a $200 price point. Note In addition to being ordinary and necessary, travel expenses also need to be for business use to be deductible, rather than personal use. So you generally can’t deduct the cost of a family vacation as travel expenses just because you’re a business owner. How To Calculate and File Travel Expenses Travel expenses are reported by businesses on relevant forms when filing taxes, which can reduce taxable income. For example, a self-employed individual often uses Schedule C to report their business income and business expenses, with travel being a line item within the “Expenses” section. Adding up travel costs can differ a bit based on the taxpayer’s preferences. For example, when it comes to accounting for travel expenses related to driving, you can use either the standard mileage rate (58.5 cents per mile for tax year 2022) or add up actual costs, such as gas, depreciation, insurance, etc. Also keep in mind that someone who has a vehicle that they drive for both business and personal use can only deduct the portion used for business. Other nuances include the cost of meals while traveling. Generally, only 50% of business meals can be deducted, although certain exceptions apply. However, business owners might decide instead to take the standard meal allowance, which is a daily amount that covers food and incidental expenses, with the exact amount depending on where the travel takes place. By taking generalized deductions such as the standard meal allowance when counting up travel expenses, a business owner doesn’t necessarily need to save receipts from every food purchase while on the road. Note You still need to keep records to prove the business travel took place. Otherwise, if your business gets audited and has insufficient records to justify travel expenses, you could potentially face penalties. What Tax-Deductible Travel Costs Mean for Individuals Understanding travel expenses can be helpful for individuals who have their own businesses, including those who freelance or do gig work, thus filling out tax forms such as Schedule C. By accounting for these costs, you can reduce your taxable income, meaning you pay less in taxes than you would if you didn’t deduct these expenses. Consulting with a tax professional or other relevant expert could help you fully and accurately take advantage of these tax-saving opportunities. However, individuals who do not have business income, such as those who are W-2 employees, generally can’t take any travel expenses on their personal returns. So, even if your employer doesn’t pay you back for business travel, you typically can’t deduct these expenses. Frequently Asked Questions (FAQs) Which business travel expenses are tax deductible? Expenses incurred when you travel away from your home for your job may be tax deductible. These expenses include costs of travel by airplane, train, bus or car. Transportation fare between hotel and work on the trip and cost of baggage. Eligible expenses may also include lodging, meals, drying cleaning, laundry, cost of business communication and any tips paid out while on the business trip. What percentage of business travel expenses are tax deductible? You can deduct 100% of your business travel expenses if they meet certain criteria. The expenses should be "ordinary and necessary" expenses incurred while traveling away form home for your job and must not be "lavish or extravagant." You cannot deduct expenses incurred in your commute to work as travel expenses. If you drive a car for both personal and business trips, only the business part of the usage is deductible. You may also be able to deduct up to 50% of your meals while traveling as business expense. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. IRS. "Topic No. 511 Business Travel Expenses." IRS. "Schedule C (Form 1040) Profit or Loss From Business." IRS. "IRS Issues Standard Mileage Rates for 2022." IRS. "Here’s what taxpayers need to know about business related travel deductions."